04.28.15: Lion Tamers

The national government announced today a series of electrical rationing measures to come into effect tomorrow in an attempt to curb demand on the country’s ailing energy grid. The announcement was made earlier today by Vice-President Jorge Arreaza and Minister of Electrical Energy Jesse Chacon.

Public sector workers (except in education, health, food production and distribution, and others) will only work from 7:30 AM to 1:00 PM.

Public and private sector workplaces must work under their own electrical power between 12:00-2:00 PM, and from 6:00-10:00 PM.

Arreaza also asked all Venezuelans to lower their air conditioners to 22 degrees. If all these goals are adhered to, Arreaza said, the government expects a drop in electricity demand of 20% in the public sector and 10% in the private sector.

We’re going to take measures against the biggest private consumers: malls, hotels, and big consumers. To any industry that uses electricity, we urge you to self-generate. You can generate your own electricity with your own power plantas [literally “plants”, but likely “generators”] so that you can help with the country’s situation.

Below, a picture of the two officials making the announcement today (Arreaza on the left, Chacon on the right):

Grid Unable to Cope with Demand

A recent increase in temperatures has driven many Venezuelans to stay indoors with air conditioners firing on all cylinders.

… due largely to sizeable subsidies that allow consumers to run air conditioners with little regard to cost.

Worry Over Reduced Public Sector Hours

The president of the Consejo Municipal de Chacao [Chacao Municipal Council] Manuel Rojas Perez had harsh words for government officials after the announcement that public sector employees would be effectively working half-days from now on.

The heads of government are lazy, and they think that all Venezuelans are, too. The truth is that the vast majority of us want to work to produce and move the country forward. [The country] is socially and economically behind thanks to the inept social policies implemented by Maduro’s government.

Engineer Arrested 10 Days Ago For Warning of Electrical Crisis

Ten days ago, the president of the Comision Electrica del Colegio de Ingenieros de Lara, Luis Vasquez Corro, was arrested by SEBIN officers after he warned that a blackout was imminent unless severe measures were taken to alleviate the pressure on the country’s electrical grid.

Economist Angel Garcia Banchs, head of the firm Econometrica, gave an interview published on Noticiero Digital today in which he asserted that the country’s foreign currency exchange system was set to “explode”, sooner rather than later.

According to Banchs, the currency exchange system is unsustainable partially because the Venezuelan economy is not expected to grow this year. Banchs explained:

The economy is fully occupied. It’s not occupied because there are jobs, because now is when unemployment and underemployment are most pronounced; rather, it’s fully occupied with raw materials, resources and many materials [needed] for production.

To Banchs, the fact the so much of the country’s industry depends on foreign materials in order to function means that foreign currency inventories will eventually reach critical levels, although “they can never go below zero”. In other words, there is an absolute amount of money that can be exchanged, and falling oil prices are causing the country to reach that maximum at an increasing rate.

When asked to describe the economic situation in the country and the government’s handling of it, Banchs used the example of a lion tamer. The government, Banchs says, is like a lion tamer; in previous years, the tamer had a whip in one hand and a juicy steak on the other. To appease the lion, the tamer would sometimes use the steak instead of the whip. Banchs argues that the steak – populist policies – is no more, and that all the tamer has now to control the lion is the whip.